Having an online store is not an easy task. Indeed, it is easier because you do it from home. However, you need to learn SEO, SEM, and have some beginner IT wit on web design to avoid spending money outsourcing a designer, social media manager, or marketing agent. So, if you want to start a dropshipping business, you have to read this first:
What you need to know before starting the biz.
Most of the money in this business model is spent on advertisements because dropshippers rely on paid marketing efforts to sell their products.
Dropshipping is more comfortable to start, but to grow and make it viable requires a considerable budget on marketing.
The first reason for the dropshipping failures is because of the wrong niche selection.
Most dropshippers just don’t have the patience to start a dropshipping store.
Though dropshipping doesn’t require a lot of investment if you are just starting out for the first time, then you need to keep a budget in mind. Let’s say you have just started your first store, so you need to keep at least $500-$800 for advertisements. If you lack even this amount of investment, then it is better not to go into dropshipping until you have saved enough.
Using the wrong platform to market their dropshipping stores and products. Facebook Ads, Google Adwords, and Bing Ads. The average CPC for baby fashion, baby accessories, and related is between $1.02 and $1.75. Every time a person clicks on the advertisement, they will charge you that amount, take into account that if your website and prices are not competitive (and offer free shipping), sure enough, you won’t get the sale.
Clients will ALWAYS compare the prices first, then the product, and lastly, your reviews.
Other hurdles to consider are delayed shipping and returns. Think about how will you handle customer satisfaction?
How to succeed with dropshipping
Find a product with a high search volume but low competition. (you need to know SEO)
Find a Supplier (s) for Your Product FIRST then design your e-store and logo. (procurement)
Find a secondary supplier as a backup.
Focus on adding as much value as possible for the customer. It is not about fulfillment. It is about solving a need. Prove excellent customer service.
Have a plan for additional income, DBM takes a lot of work, and there’s a huge learning curve. The first few months that you’re in the business, you aren’t going to make very much, if anything. Usually, it is all about investing in ads to penetrate the market.
Pay attention to the product margins, especially after factoring in the costs of shipping.
Focus on your pricing strategy
How do you plan to set prices? Not every business can go for a low price as the differentiator. Instead, you should focus on a competitive price (average).
Look at the competition. Is your pricing strategy cost-based? Adding all the costs of manufacturing your product PLUS a margin to make a profit. Is your pricing strategy value-based? Average price plus a margin based on services provided and brand.
Do you plan to set prices on how much your competition charges? Or a lower price to enter the market but planning to rise it later as you position yourself? Perhaps your pricing is a constant sale price, that is, a markup that allows you to have the product/service on sale at all times.
If you are a startup, the easiest pricing strategy is cost-based, but do your research.
Remember that pricing includes promotion, distribution, and operations. Moreover, your pricing strategy needs to attract customers to buy your product/service and reflect its value.
Learn from your competitors, and do better.
The best way to improve is to learn from your role models, in life, and in business. When opening a new business, look for companies you admire and inspire you to get into the business, also, research and study establishments that offer the products or services that you intend to sell.
Create a table with the three competitors and make a thorough compare and contrast kind of essay exercise. Include products, price, quality, customer service, sales method, reputation, social media, and website.
After you are done with this, write down how you are different or similar to your competitors.
Focus on what makes you unique and separate from your competition.
Find the right channel for your niche.
Before going crazy posting all day long, start by selecting the right audience for your niche, that is, the group of people you want to reach and sell to.
After selecting the audience for your niche market, design a marketing strategy to use the right channel, think of how you want to share your story or post,
Large users in the 25-30 yr old bracket, and 30-49 yr old bracket. 75% are female users practically even between suburban and urban.
Large users in the 18-24 yr old bracket, and 25-30 yr old bracket. 43% are female users, and 46% urban.
Large users in the 18-24 yr old bracket, and 30-49 yr old bracket. 42% are female users with an even urban and rural audience (30%)
Large users in the 16-24 yr old bracket, and 25-30 yr old bracket.
90% of users are in the 18- 24 yr old bracket. 78% are male users practically even between suburban and urban. (75%)
Large users in the 30-49 yr old bracket, and 25-30 yr old bracket. 30% of male users with an even urban and rural audience (31.5%)